As the business world becomes ever more reliant on technology and digital transformation continues to revolutionize every sector within every industry, the importance of keeping our data safe has never been more critical. Every day, reports highlighting the damaging impacts of data breaches and business email compromise make the headlines, with some of the largest companies in the world suffering significant attacks that affect both those within the company and its broader user base.
Today, data is like gold, monetized at every stage of its existence and sold for a profit by many companies. It’s also collected and stored on mindboggling scales, with an estimated $19 billion spent acquiring and analyzing consumer data in 2018 alone. However, with all this data comes great responsibility, and data breaches impact businesses of any size. Here, we explore how those data breaches can affect businesses and how the consequences can quickly become serious.
5 Common Impacts of Data Breaches
Perhaps the most apparent impact data breaches have on businesses, both large and small, is financial. Breaches of any size can quickly incur costs running into the millions of dollars, as they span a broad range of factors, including:
- Identifying the breach and the associated entry points;
- Recovering data or paying ransoms; and
- Implementing systems to ensure that those breaches are less likely to occur in the future.
Especially for larger companies, data breaches can significantly impact your reputation. Naturally, consumers need to be able to trust any company with their sensitive data, and if cyberattackers or other parties access that data, then trust is likely to be eroded. Often, negligence or outright mercenary practices can have the most impact. If any company is seen to be careless with consumer data or sells that data without consent, then consumers are much less likely to be willing to give that data in the first place.
Data breaches can have a significant impact on your company’s productivity. For example, if a critical database is compromised and your staff cannot access the information it contains, productivity will take a big hit. Put simply, data breaches can make it impossible for your employees to do their jobs.
As a consequence of both the financial and reputational issues surrounding data breaches, liability for the data you collect and store is also a very real issue. Most businesses must meet specific criteria for collecting and storing data, following strict privacy regulations and laws. If you deviate from those regulations and laws or fail to protect your businesses from potential threats adequately, you may be held liable and face both fines and other legal penalties.
All of these impacts can create lasting damage to your business—in fact, they may put its very future in jeopardy. Therefore, you must create contingency plans in the event of a data breach to mitigate the impacts and ensure you can continue to operate.
The Bottom Line
Implementing a plan in the case of a data breach should be a core component of your business strategy. It could very well help you avoid many of the most significant impacts related to business-based data breaches.